Superior Plus to Sell Construction Products Distribution Business for US $325 Million

TORONTO, ONTARIO--(Marketwired - July 5, 2016) - Superior Plus Corp. ("Superior") (TSX:SPB) announced today it has entered into a definitive agreement to sell its Construction Products Distribution business ("CPD") for total cash consideration of US$325 million (approximately Cdn. $420 million) to Foundation Building Materials, LLC (the "Transaction"). The Transaction is subject to customary purchase price adjustments, closing conditions and the receipt of required regulatory approvals and is expected to close in the second half of 2016. For further information regarding all terms and conditions contained in the definitive agreement, please see Superior's material change report, which will be filed in connection with this Transaction.

Completion of the Transaction will allow Superior to reduce debt, increase its financial flexibility and enable Superior to redeploy capital to its Energy Distribution and Specialty Chemicals businesses. The divestiture of CPD simplifies Superior's business model by exiting its most cyclical business.

The sale of CPD follows a strategic review process which commenced in early 2014. This review was subsequently terminated as management did not believe that prospective acquirers were offering a value reflective of CPD's core business, attractive free cash flow and sizable growth opportunities. Following the termination of the initial strategic review process, Superior made significant efforts to increase the standalone value of CPD. These efforts included the implementation of a new management team, the initiation of various growth initiatives and the execution of other transformational initiatives including the replacement of two legacy ERP systems with a single, integrated system.

Luc Desjardins, President and Chief Executive Officer stated, "We are extremely pleased with the execution of this agreement with Foundation Building Materials. This transaction is transformative for our balance sheet and is the foundation for Evolution 2020 where we will focus on our Energy Distribution and Specialty Chemicals businesses. With a strong balance sheet we will pursue accretive acquisitions, expansions of existing footprints as well as organic growth while maintaining our continuing focus on best in class operations and customer service. Through patient execution of our strategy to create value for our shareholders, we have surfaced an attractive valuation for CPD. This reinforces my belief that we made the right decision in 2014. I would like to thank Mike Farrell, the senior management team, and all the employees of CPD for their dedicated service while part of the Superior Plus family."

The proceeds from the sale of the CPD segment will initially be used to repay indebtedness under Superior's credit facility. Assuming the Transaction is completed as anticipated, the proposed reduction of indebtedness under the credit facility is expected to lower Superior's leverage ratio to a range of approximately 2.0 - 2.5X EBITDA (from 3.4X as at March 31, 2016), below the target range of 3.0 - 3.5X EBITDA. The Transaction will also initially result in a reduction of Superior's adjusted operating cash flow ("AOCF") from the date the sale is completed. Superior's current corporate outlook, which does not include any effects of the Transaction, had assumed CPD would contribute AOCF of approximately $0.17 per share for the last six months of 2016.

BMO Capital Markets is acting as exclusive financial advisor to Superior and Orrick, Herrington & Sutcliffe LLP and Norton Rose Fulbright Canada LLP are acting as legal advisors to Superior in relation to the Transaction.

About the Corporation

Superior consists of three primary operating businesses: Energy Distribution includes the distribution of propane and distillates, and supply portfolio management; Specialty Chemicals includes the manufacture and sale of specialty chemicals; and Construction Products Distribution includes the distribution of specialty construction products.

About Foundation Building Materials

Foundation Building Materials ("FBM") is a leading North American distributor of building materials focused on meeting and exceeding the needs of local construction trades with best-in-class services. Based in California, FBM has more than 2,000 employees in nearly 100 locations across 18 states. FBM's core values - safety first, a focus on customers and team members, honesty and integrity - form the foundation for an outstanding customer experience that is recognized across the industry.

Certain information included herein is forward-looking, within the meaning of applicable Canadian securities laws. Such information is typically identified by words such as "anticipate", "believe", "could", "estimate", "expect", "plan", "intend", "forecast", "future", "guidance", "may", "predict", "project", "should", "strategy", "target", "will" or similar expressions suggesting future outcomes. Forward-looking information in this news release includes forward looking information relating to the completion and timing of, and the use of proceeds from, the Transaction, Superior's expected leverage after completion of the Transaction and the expected adjusted operating cash flow of CPD for the last six months of 2016. Superior believes the expectations reflected in such forward-looking information are reasonable but no assurance can be given that these expectations will prove to be correct and such information should not be unduly relied upon.

Forward-looking information is not a guarantee of future performance. By its very nature, forward-looking information involves inherent assumptions, risks and uncertainties, both general and specific, and risks that predictions, forecasts, projections and other forward-looking information will not be achieved, including risks relating to satisfaction of the conditions to, and completion of, the Transaction. Should one or more of these risks and uncertainties materialize, or should assumptions described above prove incorrect, Superior's actual performance and results in future periods may differ materially from any projections of future performance or results expressed or implied by such forward-looking information. We caution readers not to place undue reliance on this information as a number of important factors could cause the actual results to differ materially from the beliefs, plans, objectives, expectations and anticipations, estimates and intentions expressed in such forward-looking information.

Forward-looking information contained in this news release is provided for the purpose of providing information about management's goals, plans and range of expectations for the future and may not be appropriate for other purposes. Any forward-looking information is made as of the date hereof and, except as required by law, Superior does not undertake any obligation to publicly update or revise such information to reflect new information, subsequent or otherwise.

Non-GAAP Financial Measures

Adjusted Operating Cash Flow

AOCF is equal to cash flow from operating activities as defined by IFRS, adjusted for changes in non-cash working capital, other expenses, non-cash interest expense, current income taxes and finance costs. Superior may deduct or include additional items in its calculation of AOCF; these items would generally, but not necessarily, be items of a non-recurring nature. AOCF is the main performance measure used by management and investors to evaluate Superior's performance. Readers are cautioned that it is not a defined performance measure under IFRS and cannot be assured. Superior's calculation of AOCF may differ from similar calculations used by comparable entities. AOCF represents cash flow generated by Superior that is available for, but not necessarily limited to, changes in working capital requirements, investing activities and financing activities of Superior.

EBITDA

EBITDA represents earnings before taxes, depreciation, amortization, finance expense and certain other non-cash expenses, and is used by Superior to assess its consolidated results and those of its operating segments. EBITDA is not a defined performance measure under IFRS. Superior's calculation of EBITDA may differ from similar calculations used by comparable entities.